International Organizations Series: Managing Public and Private Partnerships
Foreword
With growing interdependence and globalization, the international arena started to evolve and international organizations (IOs) became significant actors in world politics. In this sense, understanding the functioning of International Organizations reveals the privileges and limits they create while providing insight into a part of contemporary world politics. This series is dedicated to discussing the evolution and basics of intergovernmental organizations.
International Organizations Series is divided into 6 sections:
International Organizations Series: Introduction and Early Examples
International Organizations Series: Managing Public and Private Partnerships
International Organizations Series: Managing Public and Private Partnerships
Since the 2007–2008 global financial crises, governments have been increasingly interested in adopting Public-Private Partnership (PPP) policy in both developed and developing countries (Osei-Kyei & Chan, 2015, p. 1335). Although there is no universal definition of Public-Private Partnerships (PPP), they have some common characteristics. PPPs refer to government agencies and private companies collaborating to finance, construct, and operate public infrastructure projects, such as transportation networks, parks, and convention centres. A public-private partnership can allow a project to be completed sooner or make it possible, to begin with. Provan and Kenis (2007) identified three types of PPP structures: lead organization structure, shared governance structure, and administrative organizational structure. This article discusses different management styles of PPPs in light of these three subcategories.
Lead organization structure is generally marked by low density and high centrality, a single organization has a great impact on key decisions, and coordinates the major partnership-level activities (Provan & Kenis, 2007, p. 235). Because of the interactions generated by a larger, more powerful organization and a group of weaker enterprises, the number of participants in this structure should be moderate. For the partnership to succeed, trust levels with the lead organization should be reasonably high even if trust levels among partners are low. In this regard, partners in a lead organization structure contribute to who coordinates and governs the PPP activities, indicating sequential partner interdependence centered on the lead (Stadtler, 2012, p. 83). In addition, partners have to agree on the common direction, which is determined by the lead organization. Therefore, lead organization structures tend to favor efficiency over inclusive decision-making, external over internal legitimacy, and stability over flexibility (Stadtler, 2012, p. 84). As part of their commitment to the UN Global Compact, MNCs are required to form partnerships to support UN initiatives such as the Millennium Development Goals (MDGs), (Soederberg, 2016, p. 20). For instance, The Girl Effect program was launched in 2008 by the Nike Foundation in collaboration with a number of IGOs and private philanthropic organizations to promote gender equality. The Nike Foundation has invested to help more than 500,000 girls around the world by providing grants to more than 100 organizations in over eighty countries (Soederberg, 2016, p. 20). As the lead organization, Nike Foundation acted as the main resource and authority during the project by directing and funding its’ partners.
Partnerships with a shared governance structure, characterized by high density and low centralization, rely exclusively on the participation and commitment of all partners for governance and coordination (Provan & Kenis, 2007, p. 234). The simplest and most prevalent type that there is no specific governing entity in this structure. A joint effort of all partners and inclusive decision making demonstrates interdependence among parties. . Power in the network is more or less symmetrical, even though there may be differences in organizational size, resource capabilities, and performance (Provan & Kenis, 2007, p. 235). Yet, the effective use of this structure requires a small number of participants, high trust density and goal consensus (Stadtler, 2012, p. 83). The Jordanian NGO “Madrasati” collaborated with the Ministry of Education, CTA-Toyota and other stakeholders to improve the teaching and education at a Jordanian impoverished Husban School. Backed with agreements between the company, the Ministry of Education and the NGO, the partners started with implementing infrastructure works at the focal school and in line with the NGO’s blueprint, the partners organized a meeting with the school community to assess the school’s needs and strengths (Stadtler, 2016, p. 112). Therefore, partners were able to determine the most important areas for improving the learning atmosphere and all of them participated in the whole decision-making and coordinating procedures.
Finally, administrative organization structure is characterized by a high or moderate number of participants and moderate trust density as well as goal consensus (Provan & Kenis, 2007, p. 236). In this context, partners the partners establish a distinct entity to manage the PPP and build formal committee structures to facilitate the partners’ decision-making processes (Stadtler, 2012, p. 83). Administrative organization model is centralized, but the members of the network still interact as they do within the lead organization model. It is possible for partners to be mutually interdependent in the way that implementation duties are performed while distinct work streams are controlled by an administrative entity. Unlike the lead organization model, however, administrative organization is not another member providing its own services, and the network is externally governed either through mandate or by the members themselves (Provan & Kenis, 2007, p. 236). With ministries, eight MNCs, and many local enterprises working together to enhance Egypt's education system, The Egyptian Education Initiative (EEI) presents an administrative organization structure could be a good example to illustrate this structure. The partners involved in the EEI include the Arab Business Council of the WEF, CA, Cisco, HP, IBM, Intel, Italian Cooperation, Microsoft, Oracle, Siemens, UNDP, and USAID. All work with the Government of Egypt (Afridi, 2017, p. 180). To govern their PPP, the partners set up a board structure and charged the Project Management Office with the overall coordination of the different activities, and most of the planned activities were realized and operational objectives were completed (Stadler, 2012, p. 85). 1,929 preparatory schools have been provided with computer labs and internet, 65,000 teachers have been trained, an International Computer Driving License (ICDL) certification program has been launched, The Egyptian Universities & Research Networks (EURN) has been modernized, and The Egypt Computer 2010 Program has been extended to include students, teachers, and professors (Afridi, 2017, p. 180).
The number of partners involved in a PPP, increases the time required to understand each partner’s interests and ways of working (Stadler, 2012, p. 86). Complexity resulting from varied partner backgrounds is decreased when lead organization structure is adopted by a PPP with only a moderate number of partners. Also, the concept of unilateralism in this structure shapes the dynamics among the partners and might reduce conflict risk. In shared governance structure, partner differences might be extremely apparent since the partners have to decide and coordinate all issues through direct interaction (Stadler, 2012, p. 87). To prevent problems caused by varied backgrounds, this type of structure requires a few partners for an effective work. To shape the dynamics among partners in administrative organization structure, the structural entity of PPP might reduce the problems since involvement of a high number of partners requires increased formalization.
These governance structures with different managements facilitate taking joint action for various entities. By using expertise of private-sector in innovation and technology, efficiency and effectiveness of public service delivery can be improved. Meanwhile, the public sector offers incentives to the private sector so that it can deliver projects on time and within budget. Especially the involvement of MNCs provides efficient and faster execution of projects since they have necessary capital and looser bureaucratic structures. Yet, there are disadvantages and criticisms as well. The impossibility of proper monitoring of MNCs by governments or IGOs creates concerns. In addition to the possibility of having a hidden agenda, the public side is criticized for being less knowledgeable than the private side, since this can cause ineffective assessment and implementation of the project.
Civil society is criticized for being a weak partner compared to the government and MNCs. A project that fails to be completed on time costs more than expected and most probably creates technical flaws, causing the citizens to bear the burden. Also, PPPs that are based on the idea that for-profit organizations can take the lead in addressing social justice issues as opposed to publicly-funded programs, are strongly criticized. PPPs are not advisable in all cases and should not be seen as a panacea, however, they do offer a number of benefits, namely, additional resources, alternative solutions, new technology, speedier delivery and customer satisfaction, covering all types of infrastructure, energy, transport telecommunications and more recently education, health, security and defence (Governance in Public Private Partnerships for Infrastructure Development, p. 3). A well-managed PPP with the proper governance structure can benefit all parties.
Bibliographical References
Afridi, M. (2017). PPPs in Global Education Policy: Looking at the case of the Egyptian education initiative. The Power of Resistance, 165–188. https://doi.org/10.1108/s1479-358x20140000012009
Governance in Public-Private Partnerships for Infrastructure Development. (2004). United Nations Economic Commission for Europe. https://unece.org/fileadmin/DAM/ie/ppp/documents/botguidegov.pdf
Osei-Kyei, R., & Chan, A. P. C. (2015). Review of studies on the critical success factors for Public–Private Partnership (PPP) projects from 1990 to 2013. International Journal of Project Management, 33(6), 1335–1346. https://doi.org/10.1016/j.ijproman.2015.02.008
Provan, K. G., & Kenis, P. (2007). Modes of network governance: Structure, management, and effectiveness. Journal of Public Administration Research and Theory, 18(2), 229–252. https://doi.org/10.1093/jopart/mum015
Soederberg, S. (2016). International Organizations in Corporatized Global Governance: A Primer. https://www.researchgate.net/publication/306960229_International_Organizations_in_Corporatized_Global_Governance_A_Primer
Stadtler, L. (2012). Designing public-private partnerships for development. M@n@Gement, 15(1), 78. https://doi.org/10.3917/mana.151.0078
Stamatoukou, E. (2013). The European Parliament, the Council and the Commission agreed for further rounds of negotiations on Mff 2014-2020. www.neweurope.eu. New Europe. Retrieved April 8, 2022, from https://www.neweurope.eu/article/first-trilogue-mff-2014-2020-ended-full-agreement/.
Visual Sources
Cover image: Crowe, C. (2018). Why we don’t need PSBs: Bank privatisation must be on the reform agenda of the next government. [Cartoon]. The Times of India. https://static.toiimg.com/imagenext/toiblogs/photo/blogs/wp-content/uploads/2018/04/PSBBank-1.jpg
Figure 1: Simonds, D. (2016). A sponge wrung dry: China’s private investors keep their hands in their pockets. [Cartoon]. The Economist. https://www.economist.com/finance-and-economics/2016/09/17/a-sponge-wrung-dry
Figure 2: Simonds, D. (2015). Uncivil society. [Cartoon]. The Economist. https://www.economist.com/china/2015/08/22/uncivil-society
Figure 3: Anonym. (2015). Public Private Partnership. [Illustration]. BOAD. https://www.boad.org/wp-content/uploads/2015/06/domaines-partenariats.jpg
Figure 4: Simonds, D. (2015). Pummelling the little platoons. [Cartoon]. The Economist. https://www.economist.com/leaders/2015/08/20/pummelling-the-little-platoons
Comments